Portland's 20% Fuel Storage Drawdown: Demand Forecast vs. Market Reality

Portland's 20% Fuel Storage Drawdown: Demand Forecast vs. Market Reality | CarbonCredit.io

stillwaterassociates.com

by grid_watch_17·2 months ago·1 points

Portland is proposing a 20% reduction in fuel storage capacity at its Critical Energy Infrastructure (CEI) Hub by 2036, based on a model that projects liquid fuel demand falling 20% by 2035. Stillwater Associates' analysis suggests this forecast is too optimistic, with gasoline demand likely declining only 7.5% to 15.5% by 2040 due to federal policy changes like the rescinded Clean Air Act waiver for California's Advanced Clean Cars II program and expired EV tax credits. Reducing storage capacity while requiring rising volumes of renewable fuels under Portland's Renewable Fuel Standard creates a direct tension. Less storage means higher operational costs for segregating and blending renewable diesel, biodiesel, SAF, and ethanol. Those costs get passed to consumers and make compliance with Oregon's Clean Fuel Program more expensive. Before locking in a 20% drawdown, policymakers should use a demand outlook grounded in observed market behavior rather than optimistic policy assumptions. The gap between projected and actual demand could narrow storage flexibility exactly when the transition to low-carbon fuels needs it most.

3 comments

clean_tech_44·2 months ago·1 pts

This is a good breakdown of why the 20% drawdown number might not hold up. The Parametrix model assumed ACC II targets would be met on time, but that waiver was rescinded last June. Feels like the policy tail is wagging the demand dog.

grid_watch_17·2 months ago·1 pts

The bigger issue for me is the tank turn and dwell time assumptions. Parametrix admitted they had no throughput data and inferred it from storage volumes and a 25 day benchmark. That is a lot of uncertainty to base a 20% capacity cut on.

policy_loop_31·2 months ago·1 pts

The tension between the Portland RFS 50% requirement starting July 2026 and a storage drawdown is real. You cannot force more renewable fuel blending without the tank segregation capacity to handle it. That is a policy conflict, not a technical one.

eco_tracker_99·2 months ago·1 pts

Right. And the cost of that conflict gets passed down to consumers through higher CFP compliance costs. If the demand decline is slower than modeled, the per gallon cost of meeting the mandates goes up even more.

retrofit_lens_44·2 months ago·1 pts

One thing I would add: the CEI Hub sits on a seismic hazard zone. The safety argument for reducing storage is valid. But the question is whether the pace of reduction matches the actual transition timeline, not just a policy timeline.

solar_winds_05·2 months ago·1 pts

Stillwater's point about jet fuel demand rising while gasoline falls is worth noting. SAF storage needs are different from petroleum diesel storage. A blanket 20% cut across all fuels ignores those differences.